EIS AND VCT CHANGES

摘要

The enterprise investment scheme (EIS) and the venture capital trust scheme (VCT) were notified to the European Commission as state aid in 2007. The government is legally obliged to demonstrate that the rules governing the schemes comply with the appropriate guidelines and treaties.rnFor all schemes the following changes willrnneed to be made:rn1. Currently at least 50% of a company's qualifying activities have to be in the UK. This will be relaxed so that a company is only required to have a permanent establishment in the UK.rn2. To bring the schemes in line with the Risk Capital Guidelines, 'enterprises in difficulty' will not be eligible for investment under the schemes.rnIn addition, for VCTs only, two further changes will apply:rn3. Currently at least 21% of total funds have to be in 'ordinary shares'. To meet the Risk Capital Guidelines' requirement for equity holdings, for future fundraising VCTs will be required to hold at least 49% of total funds in 'equity'.